The latest technological trend to take over the fin-tech space is the advent of digital currencies, including cryptocurrencies such as Bitcoins. Even though they are rife with complexities, digital and cryptocurrencies are a new way forward in the field of finance and technology.
If you believe the common myth that digital currency and cryptocurrency are the same things, you might be in for a surprise. If you want to know the differences between the two, this blog is for you. Read on to find out their definitions and the differences between them.
What is Digital Currency?
Digital or virtual currencies are digital representations of the actual capital stored in economic institutions such as banks and e-lenders. They replace actual money for transactions happening in the digital space. Since digital or virtual currencies represent the actual value of money, they cannot be generated, unlike cryptocurrencies.
What is Cryptocurrency?
Cryptocurrencies are a type of digital currencies that are algorithm powered and are used as tokens in online communities. These currencies are used for peer-to-peer payments and can be generated by solving complex algorithms using computers. Bitcoins are a popular form of cryptocurrency.
Cryptocurrencies use blockchain, which is a decentralized ledger, to ensure that no single individual or authority can get to control the operations.
What are the differences between cryptocurrency and digital currency?
Here are the main differences between cryptocurrencies and digital currencies in a simple tabular format.
|Cryptocurrencies are decentralised and the regulations inside the network are governed by the majority of the community.||Digital currencies are centralised and transactions are regulated by a single source such as the bank.|
|There is a greater degree of transparency in cryptocurrencies. Anyone can see the transactions made by any user as all transaction records are saved in the block-chain.||Digital currencies are not transparent. You can’t select the address wallet and check the money transfers made by other users.|
|Cryptocurrencies are regulated by multiple communities.||Digital currencies are controlled by a central authority that deals with different issues and problems. This authority also holds the power to freeze and cancel transactions.|
|Cryptocurrencies are currently unregulated and there is no solid legal framework to control them.||Most countries have well developed a legal framework for digital currencies.|
With newer forms of digital and cryptocurrencies are launching in the market, there is a lot of potential for a career in the domain.
If you want an exciting and interesting career and come from an IT background, you can pursue a career in blockchain and digital currencies. You can use the option of an online cryptocurrency course to fast-track your career in this domain.